Anchorage

Conventional Mortgages

What is a Conventional Mortgage?

A Conventional Mortgage is simply any mortgage loan that is not insured or guaranteed by the federal government. Conventional Mortgages typically require a higher down payment, usually 5%–20%. They also have higher income and credit score requirements than government loans.

Conventional Mortgages can have a fixed interest rate or an adjustable interest rate. Typical fixed-rate loans have a term of 30 or 15 years. However, Academy Mortgage offers 30-year, 25-year, 20-year, 15-year, and 10-year fixed-rate options.Click here for more information about Fixed-Rate Mortgages

Conventional Mortgages are also categorized as conforming or non-conforming. If a loan meets the underwriting requirements set forth by the government-sponsored entities Fannie Mae and Freddie Mac, it is considered a conforming loan. If a loan does not meet all these requirements, it is considered a non-conforming loan.

One of the main factors that determine whether a mortgage is conforming is the loan amount. Generally, a mortgage with a loan amount below $417,000 is considered conforming, whereas any loan amount above $417,000 is considered non-conforming, or a Jumbo Mortgage. Conforming limits may be higher in areas of the country with more expensive housing; for example, the conforming limit is $625,500 in Alaska and Hawaii. Jumbo Mortgages usually have a higher interest rate because they carry greater risk.Click here for more information about Jumbo Mortgages

What are the benefits of a Conventional Mortgage?

Conventional Mortgages offer the following features:

Buyer has immediate equity in the property.

No private mortgage insurance is required with a 20% down payment, which is a great advantage.

Lower closing costs and fees.

Closing costs and fees may be included in the loan.

Repayment terms are generally more favorable.

Fewer bureaucratic hurdles, making the loans quicker to process.

No government stipulations and prepayment penalties if you sell or refinance your house.

Who may benefit from a Conventional Mortgage?

Conventional Mortgages are ideal for buyers with excellent credit who can afford a down payment.

For more information

Contact your Loan Officer today to see if a Conventional Mortgage is the right solution for you. We take pride in delivering value and savings to homebuyers across the United States. It would be a pleasure to help.